Offshoring: Who is Harmed?

By Jane Lawrence Sumner | March 21, 2017

The Trump administration has made opposition to trade and offshoring a hallmark of its economic and social policies. Its “America First” strategy, which President Trump introduced in his inaugural address, paints globalization in especially stark and violent terms: “The wealth of our middle class has been ripped from their homes and then redistributed across the entire world… We must protect our borders from the ravages of other countries making our products, stealing our companies, and destroying our jobs. Protection will lead to great prosperity and strength.” The focus on the destruction of jobs has been central to Trump’s campaign and his early presidency, and appears to be a very targeted message: we are going to save the jobs of white, working class men.

Recent research shows that men are especially aggrieved by offshoring, and my own research shows that white men in particular attach a strong political salience to offshoring regardless of their own economic conditions, but is offshoring really just an issue for men?

When President Trump talks about other countries making our products, stealing our companies, and destroying our jobs, he is referring to the phenomenon of offshoring. Offshoring, sometimes called ‘outsourcing’, refers to the economic phenomenon of jobs being moved overseas. Yet of course this does not literally refer to jobs actually being shipped abroad, as the rhetoric suggests, but instead a natural response to the pressures of global trade. Countries focus their economic energies on producing products they can make relatively cheaply, and import the rest. As a result, the US tends to import many products that use a lot of labor to produce, since labor is less expensive abroad. As we import those products instead of making them here, there is a decrease in jobs here and an increase in jobs abroad.

Popular understanding of offshoring tends to focus on its effects in manufacturing. Offshoring primarily hurts those whose work involves routine and repetitive tasks. [i] While many occupations fit this description – support roles that can be conducted over the phone or internet rather than in person, especially — the conversation about offshoring most often focuses on jobs in manufacturing. These workers suffer in the form of job losses and lowered wages.

It is difficult to say exactly how many jobs in manufacturing have been lost to offshoring, largely because the same characteristics that make a job vulnerable to offshoring also make it easy to replace with robots.

Yet data from the Bureau of Labor Statistics does show us that there are fewer manufacturing jobs in the US now than there were in 2007, although the big drop in manufacturing jobs happened in 2010, and the number has been steadily growing since (Figure 1 below).

Another thing the data make clear is that manufacturing is a male-dominated field (Figure 2, below). On average, almost three-quarters of manufacturing jobs in the US are held by men. Logically, this would suggest that any job losses that do occur primarily hurt men, and research suggests that white men in particular tend to be affected by offshoring. Researchers have found that white men in areas most exposed to the labor market disruptions caused by trade are especially likely to die by suicide and my own recent research with Andrew Kerner (U. of Michigan) and Brian Richter (U. of Texas) shows that white men feel especially and uniquely aggrieved by offshoring, even when we account for their own economic situation.

Yet what is interesting about the plots of the BLS data is that when manufacturing jobs decreased, the proportion of those jobs held by men actually slightly increased. While this could absolutely be statistical noise, it does suggest that, while more men were hurt by job losses in manufacturing, women may be the long-term casualties. As Figure 2 shows, this small increase in the proportion of manufacturing jobs held by men looks somewhat differently when we look at total jobs: while more men lost jobs when manufacturing employment dipped, they have also accounted for a larger share of the new job creation.

The increase in women working in manufacturing is almost imperceptible on this plot, when viewed on the same scale as men, while employment among men is steadily increasing.

While these plots do not control for other possible explanatory factors and cannot explain why this is happening, they do suggest that job losses in manufacturing – whether due to offshoring or to automation, another likely culprit for the loss of highly routinized jobs – may have disproportionately hurt women. As new jobs have been created in manufacturing, the field may be becoming more male-dominated.

It is also possible – maybe even probable – that the male-domination of manufacturing is why it is such a great talking point for Trump. While it is difficult to disentangle whether his strong support among white working-class men is a cause or an effect of his messaging, that support base is strong and Trump shows signs of continuing to speak to them and address their concerns. While he has made a great spectacle of visiting and “saving” jobs at a Carrier plant in Indiana, or “stopping” automobile factories from investing in Mexico, there have been recent closures and job losses that have gone entirely unmentioned. Retail establishments such as Macy’s, Wet Seal, and Sears have all announced massive closures in recent months, with Macy’s alone shedding 10,000 jobs. Despite this accounting for more job losses than either Carrier or the automobile companies, there has been no mention of “saving” these jobs. And that may well be because the service sector is female-dominated, and the administration does not think women’s work is worth saving.

[i] Owen, Erica. Exposure to Offshoring and the Politics of Trade Liberalization: Debate and votes on Free Trade Agreements in the U.S. House of Representatives, 2001-2006. International Studies Quarterly. Forthcoming.